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ORIIIANCE 110 2009 - 9 4 ---...,. AN ORDINANCE AUTHORIZING THE ISSUANCE OF A NOT TO EXCEED $19,000,000 GENERAL OBLIGATION SCHOOL BOND, SERIES 2009, OF THE CITY OF PORTSMOUTH, VIRGINIA, TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAILS THEREOF. WHEREAS, the City Council (the "Council") of the City of Portsmouth, Virginia (the "City"), has determined that it is necessary and expedient to borrow an amount not to exceed $19,000,000 and to issue its general obligation school bond (as more specifically defined below, the "Local School Bond") for the purpose of financing the capital project for school purposes described in Exhibit A hereto; and WHEREAS, the City held a public hearing, duly noticed, on October 13, 2009, on the issuance of the Local School Bond in accordance with the requirements of Section 15.2-2606, Code of Virginia 1950, as amended (the "Virginia Code"); and WHEREAS, the School Board of the City has, by resolution, requested the Council to authorize the issuance of the Local School Bond and consented to the issuance of the Local School Bond; and WHEREAS, the Bond Sale Agreement (as defined below) shall indicate that $18,000,000 is the amount of proceeds requested (the "Proceeds Requested") from the Virginia Public School Authority ("VPSA") in connection with the sale of the Local School Bond; and WHEREAS, VPSA's objective is to pay the City a purchase price for the Local School Bond which, in VPSA's judgment, reflects the Local School Bond's market value (the "VPSA Purchase Price Objective"), taking consideration of such factors as the purchase price to be received by VPSA for its bonds (the "VPSA Bonds"), the underwriters' discount and the other issuance costs of the VPSA Bonds and other market conditions relating to the sale of the VPSA Bonds; and WHEREAS, such factors may result in the Local School Bond having a purchase price other than par and consequently (i) the City may have to issue the Local School Bond in a principal amount that is greater than or less than the Proceeds Requested in order to receive an amount of proceeds that is substantially equal to the Proceeds Requested, or (ii) if the maximum authorized principal amount of the Local School Bond set forth in Section 1 of this Ordinance does not exceed the Proceeds Requested by at least the amount of any discount, the purchase price to be paid to the City, given the VPSA Purchase Price Objective and market conditions, will be less than the Proceeds Requested; and WHEREAS, VPSA intends to issue the VPSA Bonds to purchase the Local School Bond and the local school bonds of certain other localities (i) as "qualified school construction bonds" within the meaning of Section 54F of the Internal Revenue Code of 1986, as amended (the "Tax Code"), which section was added to the Tax Code by the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5, 123 Stat. 355), enacted on February 17, 2009, and (ii) pursuant to allocations of the Commonwealth of Virginia's share of the national limitation for qualified 99841832